Boeing to lay off 750 in Southern California

May 21, 2008 12:06:28 PM PDT

LOS ANGELES, Calif. --

The Boeing Co. said Wednesday it will lay off 750 Southern California employees after losing a lucrative military satellite contract and seeing a dip in demand for the technology.The cuts involving engineering staff at plants in El Segundo and Seal Beach mark the latest blow to the aerospace industry in Southern California.

In 2006, Chicago-based Boeing began shutting down production of C-17 military cargo plane at its Long Beach plant. It was the last major airplane factory left in Southern California, which once dominated the nation's aerospace industry.

The latest cutbacks come after Boeing lost the satellite contract to rival Lockheed Martin Corp.

The reduction will take the staff of Boeing Space and Intelligence Systems, the company's satellite division, from 7,200 employees to about 6,450.

"The stretching out of government contract awards, along with a continuing lighter demand in the commercial marketplace for large, high-powered satellites, has created a surplus in the work force," satellite division chief Craig Cooning said.

The Pentagon announced last week that it selected Lockheed Martin over Boeing for the Air Force contract worth up to $3.57 billion to build as many as 12 next-generation global positioning satellites.

The deal was the first of three awards intended to supply a total of 32 satellites for the Pentagon's new GPS III system. Manufacturing the first satellites puts Lockheed in a strong position to win the two follow-on contracts, analysts said.

Major competitions for Air Force, NASA and other government satellite contracts also have been delayed with no winner announced, Boeing spokesman Lewis Brinson said.

Boeing said the first 100 satellite employees will be laid off in July. The remaining 650 workers will be released in July and August.

The company said it will help the employees find jobs at other Boeing locations.